HomeMy WebLinkAboutAgenda Packet 01/30/2018 Utility Advisory Committee Special Meeting
City Council Chambers
Port Angeles,WA 98362
January 30,2018
3:00 p.m.
AGENDA
This is a special meeting for the purpose of orientation and training for Utility Advisory Committee
members.
I. Introduction: (King)
What is the UAC and what does it do?
What does the UAC review?
UAC membership
H. City Utilities: (Fulton)
Summary of the different utilities, what they do,and some statistics.
M. Responsibilities of Public Officials: (Bloor)
IV. Loosely Using Robert's Rules of Order: (King)
Modifying and using Robert's Rule of Order for a smooth and transparent meeting.
V. How Does the City Decide What to Repair, Rehabilitate,or Replace: (Fulton)
VI. Next Meeting Date: February 13, 2018
VII. Adjournment
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CHAPTER 2.68 - UTILITY ADVISORY COMMITTEE
2.68.010- Purpose.
The declared purpose of this chapter is to provide a mechanism for the City Council of Port Angeles to
obtain the benefits of recommendations, advice, and opinions on those matters affecting City utility policy
and operations from a committee which may devote the necessary study to careful consideration of such
matters and which will increase citizen participation and input to local government.
(Ord. 2489 § 1, 5/27/1988)
2.68.020-Committee created.
There is hereby created a Utility Advisory Committee which shall consist of eight members.
(Ord. 3588 § 3, 9/5/2017; Ord. No. 3437 § 1, 9/20/2011; Ord. 3255 § 1, 9115/2006, Ord. 2489 §
1, 5127'1988)
2.68.030- Membership.
A. Procedures.
1. Three Council members of the Utility Advisory Committee shall be appointed by the Mayor from
the seven members of the City Council.
2. Five citizen members of the Committee shall be selected and appointed in accordance with
Chapter 2.25. One of these members shall represent the industrial customers of the City's
utilities; the second member shall represent the licensed care facilities in the City; and three
members shall represent all other customers of the City's utilities. For purposes of this chapter,
"industrial customers" means those customers who are served under the City's industrial
transmission electric rate classification. For purposes of this chapter, "licensed care facilities"
includes adult family homes, boarding homes/assisted living facilities, and nursing homes. The
representative of the licensed care facilities shall vote only on issues concerning fees
authorized by Part C of PAMC 13.73.300.
3. Citizen members may be removed from office for reasons deemed appropriate by the
appointing authority, including, but not limited to, malfeasance in office or neglect of duties.
B. Criteria. Criteria used in selecting citizen members shall include, but not be limited to, the following:
1. Members shall be residents of the City, except the member representing the licensed care
facilities need not be a City resident but must own or manage a licensed care facility in the City.
2. Members shall have displayed an interest in the work of the Committee.
3. Members shall be selected in accordance with the equal opportunity guidelines.
4. Members shall be appointed without regard to political affiliation.
5. Members shall not be City employees.
C. Terms. Terms for citizen members shall be as follows:
1. A full term of office shall be four years.
2. Members of the Committee may be selected to serve consecutive terms; provided that no
person, except one appointed to represent industrial customers, shall be allowed to serve more
than two consecutive four-year terms.
(Ord. 3588 § 3, 9/5%2017; Ord. No. 3437 § 2, 9/20-2011; Ord. 3316, 2/15/2008; Ord. 3255 § 1,
91152006, Ord. 3051 § 3, 5/26/2000; Ord. 2975, 11/28,4997; Ord. 2489 § 1, 5/2711988)
Editor's note— It should be noted that the reference to TAMC 13.73.370" has been changed to
TAMC 13.73.300" in subsection A.2. by the codifier.
2.68.040-Organization.
A. The Committee shall elect its own chairman and vice-chairman from among its members and create
and fill such other offices as it deems necessary for efficient operation. It shall adopt rules for the
transaction of business and keep written record of its meetings, resolutions, transactions, findings
and determinations, which record shall be a public record.
B. The Committee shall hold meetings as deemed necessary by the City Council to carry out its duties.
There shall be a fixed time and place of meetings which shall be made known to the public, and all
regular sessions of the Committee shall be open to the public. Four members shall constitute a
quorum for the conduct of official business.
(Ord. 3588 § 3, 9/5/2017; Ord. 3255 § 1, 9115/2006, Ord. 2489 § 1, 5/27/1988)
2.68.050- Duties.
The Committee shall be responsible to the City Council for its duties and actions. The duties of the
Committee shall include, but not be limited to, the following:
A. To give advisory recommendations to the City Council on matters relating to City utility policy
and operation and all other matters as the City Council may deem appropriate.
B. To adopt bylaws, rules and regulations consistent with the laws of the State of Washington for
conducting the meetings of the Utility Advisory Committee.
C. To maintain and preserve the confidentiality of information discussed in executive session
pursuant to Ch. 42.30 RCW and the City Council's Rules of Procedure.
(Ord. 2489 § 1, 5'27.1988)
Public Works:
Public Works & Utilities Department 360-417-4800
Director—Craig Fulton, P.E. Email:
-. publicworks@cityofpa.us
crnra�"
Streets & Stormwater Division
Streets Division maintains City streets, alleys, street and regulatory signs, sidewalks, public parking areas
and traffic controls for public safety. Stormwater Division collects stormwater from residential,
commercial, and industrial uses. The City system has more than 110 miles of stormwater pipe and
operates in compliance with the National Pollution Discharge Elimination System (NPDES) Phase 2
Permit.
STAFF: 12 Full Time / 1.2 Seasonal Employees (8 Streets; 3 Stormwater)
BUDGET: Operations (Streets): $2.1 Million
Operations (Storm Water): $1.6 Million
STREETS (General Fund) SERVICES & PROGRAMS
• 38.5 miles of arterial roadways
• Signs and markings maintenance
• 86 miles of residential streets
• Pothole and pavement repair
• 60 miles of sidewalk
• Bridge maintenance
• 35 miles of alleys
• Snow and ice response
• 6 bridges
• Traffic signal operation and maintenance
• 26 traffic signals
• Traffic control and event support
• 8,000 regulatory, warning and
• Roadside shoulders
informational signs • Pedestrian & bicycle Infrastructure
maintenance
STORM SYSTEM (Utility) Street sweeping
•
• 82.5 miles of storm drain pipe Tree and brush trimming for sight distance
•
• 28 miles of culvert Ditch and storm system cleaning
• Stormwater pollution controls
• 2,400 catch basins •
• 855 manholes Flood response
• Support to all other City Departments
• 1 pump station
or
• 14 stormwater structures
• New rain gardens
STREETS&STORMWATER DIVISION - ;
Eric Wheatley-Superintendent
Phone: 360-417-4825/Email: ewheatle@cityofpa.us
1703 B Street/Port Angeles SID y
Visit: www.cityofpa.us
Nov.2017
vcwr Public Works:
Public Works & Utilities Department 360-417-4800
` or "' Director—Craig Fulton, P.E. Email:
��' publicworks@cityofpa.us
Wastewater Division
Provide safe, reliable collection and treatment of wastewater in compliance with National Pollution
Discharge Elimination System (NPDES) Permit.
STAFF: 12 Full Time / 1 Seasonal Employees (6 Plant Ops/Maint. 2 Field Crew)
1 Lab Tech; 2 Source Control - 1 is DOE Grant funded)
BUDGET: Operations: $6.2 Million
ASSETS SERVICES & PROGRAMS
Collection System • 7,297 residential / 1,084 commercial
• 1,796 manholes customers
• 17 pump stations . Annual pipeline flushing and video
• 12 miles of pressurized sewer inspection
transmission line . Root and obstruction removal
• 118 miles of gravity sewer lines • 2.6 million gallon annual septage
Wastewater Treatment Plant treatment
• Built 1970, Expanded 1993 • Combined Sewer Overflow (CSO) control
• Primary and secondary treatment • Commercial waste pretreatment
• 6.7 million gallons per day (MGD) • Pollution prevention & control
capacity (permit) - Avg 2.5-3 MGD • Sewage spill and odor complaint response
• Storm Events: Up to 13.4 MGD ;. I '
Flow; 20 MGD after CSO project . . ----�-
completion V7, 4
WASTEWATER DIVISION
t �A
Jeff Young—Wastewater Treatment Plant .: . .:.•1 ej
Superintendent
Phone: 360-417-4690 Email: jyoung@cityofpa.us
=- . .
1703 B Street/Port Angeles
Jason Hart—Wastewater Field Superintendent
Phone: 360-417-4855 Email: jhart@cityofpa.us
1703 B Street/Port Angeles
Visit: www.cityofpa.us
Nov.2017
Public Works:
Public Works & Utilities Department 360-417-4800
Director—Craig Fulton, P.E. Email:
`J publicworks@cityofpa.us
Light Operations Division
Operate and maintain reliable electric power for residential and commercial customers. Port Angeles is
the fourth oldest electric utility in Washington State.
STAFF 17 Full Time
BUDGET Operations: $9.6 Million
Annual Power Purchase: $19 Million (from Bonneville Power Authority)
ASSETS
Power Distribution
• 70.5 megawatt hours (MWH) supplied daily SERVICES & PROGRAMS
(excluding McKinley Paper Company)
• 9,017 residential / 1,603 commercial
• 56 mwh maximum demand
customers
(excluding McKinley Paper Company) • 99.995% Reliability
• 9 miles of high voltage transmission lines
• Over 700 electrical permits annually
• 7 Substations
• Annual power pole testing/replacement
• 103 miles of overhead lines
• Annual tree trimming program
• 40 miles of underground lines
• Annual underground cable upgrades
• 9,000 wood and fiberglass poles • Electric meter replacement
• All PCB transformers removed
• Installation of downtown banners and holiday
decorations
Street Lighting
• 1,100 Street Lights
F:
• Converting to energy efficient LED lights
A,
LIGHT OPERATIONS DIVISION
Michael Cyr- Manager
Phone: 360-417-4731/Email: mcyr@cityofpa.us
2007 S.0 Street/Port Angeles
Visit: www.cityofpa.us !'
Nov.Zc17
u .. Public Works:
Public Works & Utilities Department 360-417-4800
Director—Craig Fulton, P.E. Email:
publicworks@cityofpa.us
Water Division
Operate and maintain the 2009 Water Treatment Plant, and City water distribution system for clean,
healthy drinking water. Source water is the Elwha River.
STAFF 13 Full Time / 3.0 Seasonal Employee (5 Plant operators; 7 Field crew)
BUDGET Operations: $5.0 Million
ASSETS
Water Treatment Plant
• Ran ney well water intake 60 feet SERVICES & PROGRAMS
below river surface w/radial well design 7,603 residential / 1,112 commercial
• Level IV Actiflo Treatment Plant— 11 MGD customers
treatment capacity • Annual water line flushing
• Leak detection
Distribution System • Backflow prevention
• 5 reservoirs for up to • Biennial water line replacement
18 million gallons storage • Water meter replacement/upgrades
• 4 booster stations for
proper water pressure
• 25 miles of transmission water mains
• 175 miles of distribution pipe
• Surface water intake (backup)—industrial line
WATER DIVISION
Jeff Young—Water Treatment Plant Superintendent
Phone: 360-417-4690 Email: jyoung@cityofpa.us
1703 B Street/Port Angeles
Jason Hart—Water Field Superintendent
Phone: 360-417-4855 Email: jhart@cityofpa.us
1703 B Street/Port Angeles
Visit: wa.portangeles.civicplus.com
Port Angeles Water Treatment Plant/Opened 2009
Nov.2017
Public Works:
Public Works & Utilities Department 360-417-4800
Director—Craig Fulton, P.E. Email:
'� .. publicworks@cityofpa.us
Solid Waste Division
Operate residential and commercial curbside collection and recycling for City utility customers, and
services to City and County residents at transfer stations, moderate risk waste and compost facilities.
STAFF 8 Full Time / .75 Permanent Part Time / 0.5 Seasonal Employees
BUDGET Operations: $13.3 Million (Includes Landfill Post-Closure)
ASSETS
55 acre Solid Waste Facility SERVICES
Operated by Waste Connections, Inc
Curbside Collection
• Regional Transfer Station (garbage disposal) • 7,100 residential garbage customers
• Blue Mountain Transfer Station
• 5 -garbage trucks
• Moderate Risk Waste Facility
• Collections 6 days per week
• Recycle center . Special collections
• Compost facility • 850 commercial customers
Operated by City of Port Angeles
6,000 recycle customers
• Scales and metal recycling pile
•
• Post closure maintenance
• 2,860 yard waste customers
• Leachate system
• 9,750 tons/year garbage
• Gas collection and flare system
• 1,953 tons/year recycle materials
• 1,350 tons/year yard debris
Compost Blue Mountain and Regional Transfer
• 3,400 cubic yards/year Class A compost Station Total Materials Handled
Education and Outreach Program
• 42,000 tons/year garbage
• Offered to all county residents and organizations
• 4,400 tons/year recycle materials
on waste reduction, recycling, composting,
• 2,400 tons/year yard debris
and proper disposal of hazardous waste.
SOLID WASTE DIVISION i rr r
Tom McCabe-Superintendent 1
Phone: 360-417-4872/Email: tmccabe@cityofpa.us
1703 B Street/ Port Angeles —
Visit: wa.portangeles.civicplus.com
Newer garbage trucks use
hybrid power for fuel economy
Nov.2017
- Public Works & Utilities Department Public Works:
--
360-417-4800
i Director—Craig Fulton, P.E. Email:
publicworks@cityofpa.us
Equipment Services Division
Provide fleet maintenance and replacement services for all City of Port Angeles municipal departments.
STAFF 5 Full Time
BUDGET Operations: $2.87 Million
ASSETS
215 Fleet vehicles:
SERVICES
• 5 aerial bucket trucks
• Preventative maintenance and repairs
• 7 fire rescue (fire engines, ambulances, • Fuel system and parts inventory
ladder truck, mobile air unit)
• Plan annual equipment replacements,
• 25 construction equipment (loaders, purchases and surplus sales
backhoes, grader, mobile generators) • Generator maintenance
• 2 portable electronic message boards • WISHA crane inspections
• 20 heavy-duty trucks (more than 26,000 Ib GVW) • Keep snow and ice removal equipment
8 medium-duty trucks (14,001 to 26,000 Ib. GVW) operational during storm events.
•
51 light-duty trucks (14,000 and under GVW) • Fabricate specialty parts and equipment
• 3 forklifts
• Mobile radio equipment
• 36 police vehicles
• Fire extinguisher maintenance &testing
• 46 small equipment (mowers, power carts, etc.)
t
EQUIPMENT SERVICES DIVISION
Brian Coburn-Manager
Phone: 360-565-3860/Email: bcoburn@cityofpa.us
1703 B Street/Port Angeles
i
Visit: www.cityofpa.usIll
Equipment display at Dry Creek Elementary School
Nov.2017
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I. The Utility Advisory Committee Standard Order of Business:
The City utilizes Robert's Rule of Order to conduct all City Council and Committee meetings.
Robert's Rules gives a framework for all parties to be heard and to participate in the decision
process.The UAC utilizes a standard agenda for all of its meetings:
1. Call to order
2. Roll Call
3. Reading and approval of minutes
4. Late Items (add to agenda)
5. Public Comment
6. Discussion Items
a. Discussion
b. Motion
c. Further Discussion (if applicable)
d. Revised Motion (if applicable)
e. Vote
7. Information Only Items
8. Announcements/Next Meeting
9. Adjournment
II. UAC Meeting and Chairman's Script:
A UAC meeting takes preparation and planning. City staff research, organize and prepare
materials for the UAC. UAC members review their UAC packets and come to meetings ready to
discuss agenda items and ask questions. The following is an example of how a typical UAC
meeting is conducted:
No. Agenda Item Script
1. Call to Order Chairman: "Today's date is the time is . This
meeting will come to order."Rap the gavel once (if gavel is
present).
Chairman to Staff: "Do we have a quorum?" If yes,then
proceed. If no,then note that no voting can occur.
2. Roll Call Chairman: "The next item on the agenda is the roll call."
Staff conducts the roll call. UAC members answer "Present"
when their name is called.Staff finishes by stating "That
concludes the roll call."
3. Reading and Approval Chairman: "The minutes of the last meeting were sent to you in
of Minutes the UAC packet. Knowing you are all judicious minute readers,
please let me know if you have found any errors."
(Pause)
Chairman: "Are there any corrections to the minutes as
distributed?"
Take corrections until there are no more
Chairman: "Do we have a motion?"
UAC Member#1: "1 move that the minutes stand approved as
distributed/corrected."
UAC Member#2: "1 second that motion."
Chairman: '7t is moved and seconded that the minutes be
approved as distributed/corrected. All in favor say Aye."
Take count of all in favor.
Chairman: "All opposed?"
Take count of opposed.
Chairman: "Minutes are approved as distributed/corrected."
4. Late Items Chairman: "Do we have any late items to the agenda?"
Add any late items to the agenda
5. Public Comment Chairman: "The next item is Public Comment. The Public may
have up to three(3)minutes or less each to speak to the
Committee about topics of their concern that is relevant to
utilities. Will the first person on the sign-up sheet please come
forward."
Continue down the sheet until all public comment is
completed or until 15 minutes has passed.
6. Discussion Items Chairman: "The next item of business is Discussion Items."
Staff will provide presentation or report.
Chairman after staff presentation or report and after UAC
members have discussed item: "Do we have a motion?"
UAC Member#1: "1 move that the UAC recommend to the
City Council that they
UAC Member#2: "1 second that motion."
Chairman: "It is moved and seconded. Do we have further
Discussion?"
Discussion either continues and a revised motion made, or no
additional discussion and the original motion stands.
Chairman: "All in favor say Aye."
Take count of all in favor.
Chairman: "All opposed?"
Take count of opposed.
Chairman: "The affirmative has it."
Continue until all Discussion items are complete.
7. Information Only Chairman: "The next item of business is Information Only
Items Items."
Staff will provide presentation or report.
No vote is required although the UAC can ask staff to provide
further information.
8. Announcements/Next Chairman: "The next item of business are Announcements.Are
Meeting there any announcements?"
After announcements are made, or if there are no
announcements: Chairman: "The next meeting is on
9. Adjournment Chairman: 'This meeting is adjourned."Rap the gavel once (if
gavel is present).
An Asset Management Overview
"How does the City determine what to repair, rehabilitate or replace,
and when?"
The City utilizes a number of means to determine what to repair, rehabilitate, and replace...and
when. A critical means for making these decisions is through the use of Asset Management.
Asset Management is a practice of monitoring and maintaining things of value, to achieve the
greatest return (particularly useful for productive assets such as plant and equipment), with the
objective of providing the required level of service in the most cost-effective manner.
Asset Management assists a utility in maximizing the value of its capital as well as its operations
and maintenance dollars, in order to execute the right proiect at the right time for the right
reason. It drives the understanding of what we own; where it is; what condition it is in; what is
its remaining useful life; and what is its value. It also focuses the utility on what are the critical
assets (i.e. PA sewage plant belt press)...those assets which have high risk of failing
(vulnerabilities) and those which will have major consequences if they do fail (emergency costs,
legal issues, social and environmental impacts, collateral damage).
Utilities are responsible for ensuring systems are in good working order, regardless of the age
of its components or the availability of additional funds (the challenge!). Asset management
uses system data —including asset attributes (e.g., age, condition, and mission criticality), life-
cycle costing, proactive operations and maintenance, and capital replacement plans to achieve
the most efficient method of meeting this challenge.
Focusing on the stages of an asset's life-cycle, from purchasing, through maintenance,
rehabilitation and finally replacement, asset management tools are used to develop and
implement a strategy with the fundamental goal to preserve and extend the service life of long-
term assets which are vital to maintaining the level of service and efficiency of the system.
CAVEAT:When adequate funding is not available to properly maintain City Assets based on sound
engineering practice (a reality across the country),the City must adjust by:
• Reducing Level of Service (e.g. allow streets to degrade, allow pipes to be "maintained by
repair" rather than rehabilitation, replacement, or upgrade)
• Assume more risk(Hope the critical parts of a system don't fail until funding becomes available)
o Cost of system failure (un-programmed emergency repairs)
o State, Federal or third party lawsuits
o Costs of collateral damage
o Lost trust in City government
• Be Reactive—Reacting to emergencies and greatest customer complaints, rather than
proactively solving systemic problems.
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Section 1 - Introduction to Asset Management
1.1 What is Asset Management
Asset management is a comprehensive approach that maximizes the performance of critical
infrastructure capital assets for the goal of achieving a consistent level of service.
Asset management tracks tangible items bought by the utility for the benefit overall operations(i.e.,
pipes, pumps, storage tanks, vehicles,etc.). It provides utility managers and decision-makers with
critical information for timing investments through an asset's useful life, while also assisting in
developing long-term funding strategies. Some key steps for asset management are:
• Creating an inventory
• Purchasing
• Rehabilitation
• Disposal or replacement
1.2 Benefits of Asset Management
The benefits of asset management include:
• Sound operational decision making
o Meeting consumer demands with a focus on sustainability
o Setting rates based on operational and financial planning
o Increased acceptance of rates
o Greater ability to plan and pay for future repairs and replacements
o Capital improvement projects that meet the true needs of the utility
• Increased knowledge of asset location and condition
o Improved emergency response
o Enhanced security and safety of assets
o Increased knowledge of which assets are critical to the utility
• Better communication with customers
o Increased acceptance of rates
o Ability to meet increasing demand for services
• More efficient operation
1.3 Core Components of Asset Management
There are five core components of asset management that provide the foundation for many
asset management best practices:
1. Asset Inventory
2. Level of Service
3. Critical Assets
4. Life Cycle Costing
5. Long-term Funding Strategy
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Section 2 -Asset Inventory
2.1 Introduction to Asset Inventory
The first core component of asset management is the asset inventory. When information is difficult
to find, estimates are used as necessary. In conducting the asset inventory the utility investigates
five key areas:
• What do we own
• Where is it
• What condition is it in
• What is the remaining useful life
• What is its value
2.1.1 What do we own?
Although this is may be a straightforward question, it is not always easy to answer. Difficulties
arise from several factors: assets may be underground; assets generally are put in over a long
period of time; records regarding assets may be old, incomplete, inaccurate or missing; and staff
turnover may limit historical knowledge.
2.1.2 Where are my assets?
This component involves two steps: 1) mapping the assets and 2) putting a location in the
inventory, especially for buried assets.
2.1.3 What is the condition of my assets?Asset condition can be determined through current and
historical knowledge of the system (e.g.type of materials used and when installed), or through
more advanced technological means (e.g. in-pipe videoing), and then placed in a condition
ranking system.
2.1.4 What is the remaining life of my assets?
All assets will eventually reach the end of their useful life. Some assets will reach this point
earlier than other assets. In addition, depending on the type of asset, it will either reach that
point through amount of use or length of service.
Factors such as poor installation, defective materials, poor maintenance and corrosive
environment will shorten an asset's life, while factors such as good installation practices, high
quality materials, proper routine and preventative maintenance and non-corrosive environment
will tend to lengthen an asset's life.
2.1.5 What is the Value of the Asset?
The installation cost does not have a direct bearing on what it will cost to replace that asset
when it has reached the end of its useful life. Costs of various assets may change drastically
over time such that the cost of installing pipe in 1966 does not reflect the cost of installing pipe
50 years later in 2016. The real value of the asset is the cost it would take to replace today.
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2.2 Organizing the Asset Inventory—Cityworks
While gathering the information is critical, it is just as important to be able to retrieve and use the
information quickly and effectively. For example, utilities need to understand the way individual
assets affect service. There are many options to manage the asset inventory, including the use of
pre-packaged Information Technology Software. The best option is a specifically designed asset
management software program such as Cityworks.
2.3 Summary
As assets are rehabilitated, repaired or replaced, inventory will become more accurate. The data
quality will increase over time as the inventory gathers more information and individuals become
more comfortable with the concept of asset management.
Section 3 - Level of Service
3.0 Introduction
A Level of Service Agreement (LOS) defines the way in which the utility owners, managers and
operators want the system to perform over the long term. The LOS can include any technical
managerial or financial components the system wishes as long as all regulatory requirements are
met. The LOS will become a fundamental part of how the system is operated.
3.1 Why a Level of Service Agreement
There are two key facets to asset management—defining the level of service the system will strive
to provide its customers over the long term and determining the most efficient and economical way
to deliver that service (the least cost approach). Therefore, determining and detailing the level of
service that the system is going to provide is a key step in the overall process.
The LOS can be one factor in determining critical assets, it can also provide a means for assessing
overall system performance.
3.2 What is the Minimum Starting Point for the LOS?
All systems must operate within the state and federal regulations and requirements; (e.g. Safe
Drinking Water Act and the Clean Water Act). The maximum level of the LOS is defined by the
maximum capabilities of the assets.
Section 4 - Critical Assets
4.0 Introduction
Assets fail ! How the consequences of failure are managed is key to success. Not all assets are
equally important to the system's operation; some assets are highly critical to operations and other
are not critical at all. Because assets fail, how to manage the consequences of failure is vital.
4.1 Determining Criticality
Not every asset presents the same failure risk, or is equally critical to a system's operations.
Therefore, it is important to know which assets are required to sustain performance. For example,
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passive assets (such as pipes) decay over time and active assets (pumps, motors)decay with use.
Critical assets are those which have a high risk of failing and major consequences if they do fail.
Things to consider in determining vulnerabilities include:
• Asset age
• Asset condition
• Failure History
• Historical knowledge
• General Experiences with the Asset
• Knowledge of How the Asset is Likely to Fail
• Time vs. Use
In determining the consequence of failure, it is important to consider possible costs, including:
• Repair costs
• Social Costs related to the loss of the asset
• Repair/ Replacement costs related to collateral damage caused by failure
• Legal costs related to additional damage caused by failure
• Environmental costs related to the failure
• Reduction in Level of Service
• Other costs associated failure or loss of an asset
4.2 Assessing Criticality
Assessing criticality requires and examination of the likelihood of failure and the consequence of
failure as discussed. The assets that have the greatest likelihood of failure and the greatest
consequences associated with the failure will be the assets that are the most critical.
Section 5 - Lifecycle Costing
5.0 Introduction
Asset Management enables a system to determine the lowest cost options for providing the highest
level of service over time. An asset management program helps make risk-based decisions by
choosing the right proiect, at the right time,for the right reason. Lifecycle Asset Management
focuses on management options and strategies considering all relevant economic and physical
consequences from initial planning through disposal. Lifecycle components include:
• Planning
• Creation/Acquisition/Design
• Operation and Maintenance
• Monitoring Condition and Performance
• Rehabilitation/ Renewal
• Disposal
• Audit and Review
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5.1 Options for Dealing with Assets over Time
There are four basic options for dealing with assets over time:
• Operate and maintain the existing assets
• Repair the assets as they fail
• Rehabilitate the assets
• Replace the assets
5.1.1 Asset Operation and Maintenance
Operation and maintenance (O&M)functions relate to the day-to-day running and upkeep of
assets and are particularly relevant to short-lived dynamic assets(such as pumps), where
deterioration through lack of regular maintenance may result in rapid failure.
It is most advantageous to the utility to spend the greatest portion of its 0&M budget on assets
that are critical to the overall operation of the utility. These assets have the greatest chance of
costing the utility money if they fail.
5.1.2 Repair of Assets
Systems need to consider how long they will keep an asset in service prior to replacement of the
asset. To some extent,these two items—repair and replacement—are off setting. There is a
balance between how much to spend in each category: maintenance, repair, and replacement
to achieve the most efficient system.
5.1.3 Rehabilitation of Assets
When an asset fails, or approaches failure, the typical thought is to replace it with a new asset.
There is another option; rehabilitation rather than outright replacement. Rehabilitation brings
the asset into a usable condition without actually replacing it. In many cases, it may be cheaper
to rehabilitate and it may extend the life span of the asset while reducing impacts related to
asset replacement. An example of rehabilitation is slip-lining a wastewater pipe that is nearing
the end of its useful life. The pipe can be lined without having to dig the original pipe out of the
ground, thus possibly reducing the costs of installation and the inconvenience of the
construction.
5.1.4 Replacement
Replaced assets can either be part of a replacement schedule or a capital improvement plan. A
replacement schedule should be developed that indicates those assets that will be replaced
within the next 20 years. This includes assets in smaller dollar amounts or routinely recurring
and should include assets funded from system revenues.
5.2 Capital Improvement Planning
A long-term capital improvement plan should be built to look at the utility's future needs. Ideally
the planning period would be a minimum of 5 years. The categories of capital improvements to be
considered include Capital needs related to:
• Future/ upcoming regulations
• Major asset replacement
• System expansion
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• System consolidation or regionalization
• Improved technology
At a minimum the following information should be identified for each item:
• Description of the project
• Brief statement regarding the need for the project
• Year project needed—is it flexible or absolute
• Estimated cost—and how the costs were derived
• Funding source(s)
• Changes in overall operations to occur as a result of the project (operator requirements,
additional O&M costs, regulatory changes, efficiencies to be gained, etc.)
• Impact of the project on LOS
5.3 Annual Review of Asset Replacement Projects
Asset replacement projects will be included in the Repair and Replacement Schedule and the Capital
Improvement Plan. It is a good idea to review both of these documents on an annual basis to
determine if all the listed projects are necessary. The questions to examine in the review include
the following:
• Is the reason/need for the project still valid?
• Have the costs changed since originally projected?
• Is there a better approach or a better technology that can be used to address the need?
• Can the project be safely delayed?
• Does the project need to be completed earlier?
• Is there a method of rehabilitation that could be used rather than replacement to save
costs?
• Would it be more reasonable to reduce the LOS than increase the asset's capability?
• Will funding be available for the project?
Section 6.0 - Long-Term Funding Strategies
Sound financial decisions and developing an effective long-term funding strategy are critical to the
implementation of an asset management program. Knowing the full economic costs and revenues
generated by the utilities will inform the City financial forecast.
The sources of funding for the overall operation and maintenance of a water or wastewater system,
including asset repair, replacement and rehabilitation include the following:
• System revenues
• System reserve funds
• System generated replacement funds
• Non-system revenues
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Section 7.0 - In Conclusion
The framework consisting of the five core areas is the starting point for asset management
• What do we own
• Where is it
• What is its condition
• What is the remaining useful life
• What is its value
Beyond planning, asset management should be implemented to achieve continual improvements
through a series of"plan, do, check, act" steps:
• Plan: Five core area (short-term), revise asset management plan (long-term)
• Do: Implement asset management program
• Check: Evaluate progress, changing factors and new best practices
• Act: Take action based on review results
Much of the above discussion was taken from: "Asset Management:A Guide for Water and
Wastewater Systems"by the Environmental Finance Center, New Mexico Tech (2006 Edition)
https://www.env.nm.gov/dwb/assistance/documents/AssetManagementGuide.pdf
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